Unique alliance pushes SJV cotton quality in marketplace

Nevertheless, the insect pest feared in California and Arizona more than a Donald Trump fears a subpoena from his latest wife was a "positive" influence in a series of events that created a marketing organization melding a fledgling association of San Joaquin Valley producers formed to preserve the virtues of SJV cotton with a man who thought he would be Calcot’s newest president but isn’t and the first San Joaquin Valley grower who faced off against the silverleaf whitefly and won.

It is not an unlikely association, but serendipitous nonetheless. It’s an alliance some of the most prominent SJV producer-members hope will bring them even greater returns than premiums now paid for SJV Acala and Pima cottons. Why? Because they believe they can deliver superior quality cotton with no contaminants like few others under the banner of the San Joaquin Valley Quality Cotton Association.

The "stars began to line up" in forming a unique marketing venture when Bruce Groefsema, the odds-on favorite to replace Tom Smith as the president of the largest cotton cooperative the West, was passed over by the Calcot board in favor of Australian David Farley and left the Bakersfield, Calif., cooperative.

The 25-year international cotton marketing veteran and former chairman of Cotton Council International walked out of Calcot and almost immediately into the fold of one of cotton’s leading merchandising firm, Weil Brothers Cotton, Inc. of Montgomery, Ala., which was wanting a greater Western presence.

However, Groefsema did not become just another independent cotton merchant, but as vice president of Weil’s western operations, became the exclusive marketing arm for the San Joaquin Valley Quality Cotton Growers Association.

Formed in 1998

The growers association was formed in 1998 when the San Joaquin Valley was opened to all cotton varieties, thus ending more than seven decades as a "one variety" cotton-growing district. Until then, only Acala upland cottons could be legally grown in the valley.

Growers like Fred Starrh and his son Larry, who farm in Shafter, Calif., were fearful this opening up of the valley would dilute the valley’s worldwide reputation for quality. They wanted to provide to textile mills a reliable source for SJV quality cotton. They joined with other growers to form the association and trademarked "SJV Quality Cotton" to stamp on each bale of cotton marketed by association members.

"We started with the original intent not to be a marketing organization, but rather a promotional organization," said Larry Starrh. "We touched bases with mills and talked with people, trying to get the logo used. However, we needed someone like Jesse Curlee at the Supima Association, but we did not have any money to hire anyone.

"We never really took off," he admitted.

"When Bruce became available, we saw the opportunity to take our idea of promoting quality cotton and make it really exciting by offering marketing, not just promotion," said Starrh.

Groefsema had worked with the grower association as a Calcot vice president and when he joined Weil Brothers, two entities started to talk.

Former Calcot members

It did not hurt that most of the SJV Quality Cotton Association members are former Calcot members and had had a long association with Groefsema there. Among the association’s founders are Fred Starrh, a former Calcot vice chairman; Kings County, Calif., producers Bill Stone and his father Jack Stone. Jack Stone is former National Cotton Council president and Bill Stone was a recent Calcot director. He is also chairman of the San Joaquin Valley Cotton Board.

Greg Palla is a third generation Kern County cotton producer who is now director of operations and growers services for Weil Brothers’ western operation. He is also a former Calcot director.

Long-time Calcot member and Kern County producer Rick Wegis is another charter member of the SJV Quality Cotton Association. Don Cameron of Helm, Calif., chairman of the California Planting Cotton Seed Association (CPCSD) board and current Cotton Foundation president is another association member. Larry Starrh is also a CPCSD board member.

What drew these mostly former cooperative members to sign up with Weil and Groefsema is a cooperative managed by the Alabama-based international marketing firm.

Formed in 1996, the Beltwide Cotton Cooperative now handles about 400,000 bales for 3,000 growers in 12 states.

Unique cooperative

"This is a true cooperative registered under the Caper Volstead Act, the only one managed by a merchant firm," said Groefsema. "The cooperative’s board of directors interviewed firms to manage the cooperative’s seasonal pools. Weil Brothers now manages five separate pools."

Besides the new Western pool to be managed by Groefsema and Palla, there are seasonal pools for producers in the Southeast, Mid-South, Texas High Plains and South Texas.

"I believe Beltwide Cotton Cooperative started with about 20,000 bales. It has doubled in size each of the past four years," said Groefsema, who was hired by Weil to expand the cooperative and Weil’s presence into the West.

Palla said what makes this multi-pool cooperative different is that there is a "defined amount to be paid for services. The cost to the growers is not dependent on volume to absorb overhead. Grower members know exactly what overhead is going to be going in," said Palla.

Weil Brothers is the licensed marketing agent of the SJV Quality Cotton Association. Association members must market through Weil either through the Beltwide cooperative or they can elect to sell cotton directly to Weil.

"We are glad to be partners with Weil, but we like to say we market through Bruce," said Larry Starrh. "Bruce has handled more Acala cotton than anyone else in the world. Bruce is the go-to guy for us."

Niche market

"There is no future growing generic cotton in the San Joaquin Valley," said Groefsema. "Because of the cost of production in the valley, we have to produce something no one else can produce and deliver to the marketplace — a niche market product."

Groefsema said his marketing efforts would focus only on the high-end textile mill that demands uncompromising quality from SJV Acalas and Pimas.

Groefsema cited data presented at the most recent Beltwide Cotton Production conference which indicated SJV cotton quality has improved dramatically over the past decade.

"Sure, people are chasing us. The quality bar has been raised worldwide. The Australians are on our heels. FiberMax varieties are getting a lot of attention.

"However, no one has caught the San Joaquin Valley," said Groefsema.

He believes the future is bright for high quality SJV Acalas and Pima. "Textile mill technology is leading to faster and faster speeds and the need for increasingly finer yarns," he added. "The San Joaquin Valley is going down that road." He credits the San Joaquin Valley Cotton Board testing and variety approval program for a large part of that advancement.

Starrh said as an association grower he is committed to producing quality cotton with high quality varieties and quality production practices.

Market delineation

"We believe there is a real delineation that can be made in the marketplace with what we are doing," he said. He also expects to be rewarded financially for the effort.

"There must be an incentive to giving mills what they want. We are not doing this for free. There are costs associated with what we are doing to delivery quality.

"What is critical to this paradigm is if our cotton increases mill productivity, mills should be able to pay more for that," Starrh said.

The question is how much more will a mill pay for a 34 grams per tex cotton vs. a 30 grams per tex, said Groefsema.

"There will be price pressures involved in marketing cotton — all cotton. That is why mills are interested in FiberMax varieties. But the question is, can FiberMax perform at the same level at SJV? We don’t think so, which leads to the question of what is a justifiable premium for SJV Acala?" said Groefsema.

Along with raising the bar on fiber properties, there are issues with shortcomings. The biggest right now from the valley is lint stickiness, and that is where a program directed by Palla will guarantee mills will receive stickiness-free cotton from the SJV Quality Cotton Association.

Faced down whitefly

Palla has the dubious distinction of being the first grower to face down the silverleaf whitefly on his cotton he farmed near Bakersfield.

"I experienced firsthand the devastation whitefly can cause to cotton lint," he said.

Palla, vice chairman of Cotton Incorporated’s Sticky Cotton Action Team, not only successfully controlled the whitefly on his farm, but also rallied his neighbors to attack the pest on a regional basis. He was an early voice in rallying the industry to bring whitefly under control to preserve the SJV quality cotton reputation.

"I think what we did in the mid-‘90s in our area in Kern County proved that working cooperatively, you can manage the problem. We showed that you can overcome the stickiness issue in advance of any detriment to the cotton rather than waiting to dig out from under the problem," he said.

"Growers in the association have demonstrated a history of honeydew-free cotton," said Palla.

And, marketers of association cotton will have facts to back up their promise of clean cotton. Growers in the association must agree to have pest control advisers monitor fields. The association will track each field, and there is an association-hired PCA who will spot check fields.

Treatment guaranteed

"Field which reach treatment thresholds as recommended by the PCA will be treated — there is no debate about that," said Palla.

Modules will be monitored and Palla said if there any question about stickiness, the cotton will not get a SJV Quality Association logo.

"Mills do not like surprises," said Groefsema.

"We are starting out marketing for association members who do not produce sticky cotton — not because they farm in areas where there are no whiteflies or aphids, but because they are committed to managing the problem," said Groefsema.

While it is stickiness that is in the spotlight now, Groefsema said, "There will always be quality issues. Now it is stickiness. It may be neps or short fiber content next. I guarantee you there will always be quality issues of interest to the mills," he said.

Groefsema said the San Joaquin Valley Quality Cotton Association is not "looking to be all things to all people. We want to focus on the growers out there who are interested in delivering quality cotton and benefit from it in the marketplace."